HB 2191 - Authorizes Payday Loans - Pennsylvania Key Vote


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Title: Authorizes Payday Loans

Vote Smart's Synopsis:

Vote to pass a bill that authorizes payday loans.


  • Prohibits any individual from contracting, originating, holding, arranging, extending, or making a short-term loan, whether electronically or by other means, without obtaining a license from the Department of Banking (Sec. 1).
  • Defines “short-term loan” as a loan or an advance of money or credit that is provided by a licensed short-term lender to an individual for a fee, finance charge, or other consideration (Sec. 1).
  • Prohibits a short-term lender from providing a loan to a borrower if providing the loan will result in either of the following (Sec. 1):
    • The borrower’s outstanding loans from short-term lenders will exceed 25 percent of his or her gross monthly income; or
    • The borrower’s outstanding loans will exceed $1,000.
  • Prohibits a short-term lender from knowingly making a loan to a borrower if the borrower has entered an extended payment plan that is still outstanding (Sec. 1).
  • Limits the finance charge for each short-term loan to $0.125 per $1.00 of the loan value (Sec. 1).
  • Authorizes a short-term lender to charge a $5 verification fee for a short-term loan or loan renewal, in addition to the finance charge (Sec. 1).
  • Prohibits a borrower from having outstanding loans from more than 2 short-term lenders at the same time (Sec. 1).
  • Prohibits a short-term loan business from being within 1,000 feet of any of the following, whereas existing law prohibits a short-term loan business from being within 100 feet (Sec. 1):
    • A racetrack or other location where both horse racing and pari-mutuel wagering take place;
    • A licensed facility where slot machine gambling takes place; and
    • A military installation or facility operated by the United States Department of Veterans Affairs.
  • Specifies that providing a short-term loan without a license is a third degree felony (Sec. 3).